Chip Eng Seng together with NTUC Choice Homes (40/60 JV), emerged the highest bidder for the Executive Condo (EC) site in Punggol, at $224m or $308 psf GFA. Next highest bid was just 4% away, but pricing still seems relatively aggressive. We est breakeven cost to be between $550-600, assuming development cost of $250-300 psf. While est ASP could be $640-690 psf, assuming 15% developer margins. This compares with ECs in nearby Sengkang transacting at $570-640 psf.
Stock trades at 2.5x PE, 0.8x PB. Westcomb has a target of $0.53 vs last close at $0.335.
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